Sunday, June 07, 2015

Experts predict stormy weather ahead for Indian airlines

Despite a significant fall in oil prices, domestic airlines are set to post losses of about $1.4 billion collectively during fiscal 2014-15, as per estimates by aviation consultancy firm Centre for Asia Pacific Aviation (Capa). The reasons are that the operating environment continues to remain tough, demand sluggish and carriers continue to face increasing cost pressures, while yields remain low with several new entrants coming in and further denting the market share of existing carriers.

While Jet Airways and SpiceJet have reported their results, others, including national carrier Air India, and unlisted companies IndiGo, GoAir, Air Asia India, Vistara and Air Costa, are yet to announce their results.
The combined losses for Indian airlines, as per Capa data, stood at $1.77 billion during fiscal 2013-14, significantly higher than Capa prediction of $1.4 billion. Between September 2014 and January 2015, jet fuel prices in India have declined by 24%. Meanwhile, the accumulated losses of Indian airlines touched $10.6 billion during the past seven years.
07/06/15  Rhik Kundu/Financial Express
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